Question: Calculate the required rate of return for Lowell Inc., assuming that
(1) the risk-free rate is 7%,
(2) the expected return on the market portfolio is 15%,
(3) the firm has a beta of 1.20, and
(4) its realized rate of return has averaged 15.0% over the last 5 years.
Hint: You may not need all of the information given.